Cantor Fitzgerald Fined $6.75 Million by SEC for Misleading Statements
Cantor Fitzgerald, a broker linked to Tether, has agreed to pay a $6.75 million penalty to the Securities and Exchange Commission (SEC) after being charged with making misleading statements to investors ahead of two special purpose acquisition companies (SPACs) initial public offerings (IPOs) that raised $750 million.
Sanjay Wadhwa, the Acting Director of the SEC’s Division of Enforcement, stated that Cantor Fitzgerald had claimed in public filings that it had not approached merger targets, despite having substantive discussions with several private companies regarding potential mergers, including the companies with which its SPACs eventually merged.
The SEC noted that Cantor Fitzgerald neither admitted nor denied the charges but agreed to pay the civil penalty.
Read more: Why are Tether and Cantor Fitzgerald lending near identical amounts?
Understanding SPACs
Special purpose acquisition companies (SPACs), also known as blank-check companies, are shell corporations with no business operations that are used to merge with or acquire a private company. Cantor Fitzgerald utilized its SPACs, CF Finance Acquisition Corp. II and CF Acquisition Corp. V, to raise funds before merging with View, Inc. and Satellogic Inc., respectively.
A spokesperson for Cantor Fitzgerald told CNBC that no investors were harmed by the alleged issues described in the order and that the company is pleased to have resolved the matter with the SEC.
Howard Lutnick, the CEO and Chairman of Cantor Fitzgerald, is currently leading Donald Trump’s Commerce Department and was appointed as co-chair for Trump’s transitional team.
Connection to Tether
A report by the Wall Street Journal revealed that Cantor Fitzgerald acquired a 5% stake in Tether, worth up to $600 million. The broker also holds the majority of Tether’s $134 billion in assets in exchange for fees amounting to tens of millions of dollars.